Annual Fundraising Appeal

The US Geological Survey recorded a minor earthquake this morning with its epicenter near Wasilla, Alaska, the probable result of Sarah Palin opening her mail box to find the latest issue of CounterPunch magazine we sent her. A few moments later she Instagrammed this startling comment…

Palin2

The lunatic Right certainly has plenty of problems. We’ve made it our business to not only expose these absurdities, but to challenge them directly. With another election cycle gaining steam, more rhetoric and vitriol will be directed at progressive issues. More hatred will be spewed at minorities, women, gays and the poor. There will be calls for more fracking and war. We won’t back down like the Democrats. We’ll continue to publish fact-based critiques and investigative reports on the shenanigans and evil of the Radical Right. Our future is in your hands. Please donate.

Day10

Yes, these are dire political times. Many who optimistically hoped for real change have spent nearly five years under the cold downpour of political reality. Here at CounterPunch we’ve always aimed to tell it like it is, without illusions or despair. That’s why so many of you have found a refuge at CounterPunch and made us your homepage. You tell us that you love CounterPunch because the quality of the writing you find here in the original articles we offer every day and because we never flinch under fire. We appreciate the support and are prepared for the fierce battles to come.

Unlike other outfits, we don’t hit you up for money every month … or even every quarter. We ask only once a year. But when we ask, we mean it.

CounterPunch’s website is supported almost entirely by subscribers to the print edition of our magazine. We aren’t on the receiving end of six-figure grants from big foundations. George Soros doesn’t have us on retainer. We don’t sell tickets on cruise liners. We don’t clog our site with deceptive corporate ads.

The continued existence of CounterPunch depends solely on the support and dedication of our readers. We know there are a lot of you. We get thousands of emails from you every day. Our website receives millions of hits and nearly 100,000 readers each day. And we don’t charge you a dime.

Please, use our brand new secure shopping cart to make a tax-deductible donation to CounterPunch today or purchase a subscription our monthly magazine and a gift sub for someone or one of our explosive  books, including the ground-breaking Killing Trayvons. Show a little affection for subversion: consider an automated monthly donation. (We accept checks, credit cards, PayPal and cold-hard cash….)
button-store2_19

or use
pp1

To contribute by phone you can call Becky or Deva toll free at: 1-800-840-3683

Thank you for your support,

Jeffrey, Joshua, Becky, Deva, and Nathaniel

CounterPunch
 PO Box 228, Petrolia, CA 95558

New Research Shows That We Shouldn't Swallow Conservative Claims About Taxes

How the Rich Are Grabbing Bigger and Bigger Slices of Pie

by SAM PIZZIGATI

What happens when nations cut taxes for their richest citizens?

Economists Thomas Piketty and Emmanuel Saez, two of the world’s most respected authorities on the incomes of rich people, have a straightforward answer: In nations that slash tax rates on high incomes, the rich significantly increase their share of national income.

Here in the United States, for instance, the tax rate on income over $400,000 has dropped by half, from 70 to 35 percent, since the 1970s. Over that same span, the households that comprise the “1 percent” have over doubled their share of the national income, to 20 percent.

In many European nations and Japan, by contrast, tax rates on the rich didn’t fall as fast or as far. And rich people’s slice of the income pie increased “only modestly,” note Piketty and Saez in a new analysis they co-authored with researcher Stefanie Stantcheva.

This phenomenon doesn’t trouble conservatives. High taxes on rich people, they claim, do terrible economic damage by discouraging the entrepreneurship that makes economies strong. Lower taxes on the rich, this argument continues, encourage entrepreneurs, who invest and create jobs when lower taxes let them keep more of the income they take in.

Yes, conservatives freely admit, the rich can and do amass plenty of money in a low-tax environment. They’ll even increase their share of national income. But the rest of us shouldn’t worry. Thanks to the rich, right-wingers argue,
we all benefit from a bigger and better economy.

Piketty and his colleagues put these claims to the test. If the conservative argument reflected reality, they point out, nations that sharply cut tax rates on the rich should experience much higher economic growth rates than nations that don’t.

In fact, the three economists note, reality tells no such story. Nations that have “made large cuts in top tax rates, such as the United Kingdom or the United States,” they explain, “have not grown significantly faster than countries that did not, such as Germany or Denmark.”

So what’s going on in countries where the rich all of sudden face substantially smaller tax bills?

In countries that go soft on taxing the rich, top business executives don’t suddenly — and magically — become more entrepreneurial, more “productive.” Instead, they suddenly find themselves with a huge incentive to game the system, to squeeze out of their enterprises every bit of personal profit their power enables.

The more these executives can squeeze, the more they can keep. The result? The 1 percent in nations that cut taxes on high incomes proceed, as Piketty and his fellow authors put it, to “grab at the expense of the remaining 99 percent.”

Millions of us know this grabbing first-hand. We’ve seen corporate execs routinely outsource and downsize, slash wages and attack pensions, cheat consumers and fix prices.

How can we start discouraging these sorts of behaviors? Piketty and his fellow analysts have a suggestion: raise taxes on America’s highest-income bracket. Raise them as high as 83 percent.

This suggestion, the three scholars acknowledge, may right now seem politically “unthinkable.” But back between the 1940s and the 1970s, they remind us, the notion that we ought to raise taxes on the rich to reduce the incentive for outrageous behavior rated as our conventional wisdom.

In those years, policymakers — and the public at large — felt strongly that pay increases for the wealthiest Americans reflected “mostly greed or other socially wasteful activities rather than productive work effort.”

Is this mid-20th century perception about pay at the top now about to make a comeback? Piketty and friends certainly think so. Let’s hope they have that one right, too.

Sam Pizzigati is an associate fellow at the Institute for Policy Studies in Washington DC, editor of the journal Too Much and author of The Rich Don’t Always Win, Seven Stories Press, New York, forthcoming 2012.

This column is distributed by OtherWords.